Author: Willis Bennett

Is It Going to Rhyme?

Daily Continuous

Price action seems to be following a similar pattern to last week with early Monday rally, holding prices near the high end of the range. Last week they stopped on Tuesday and Wednesday set up the low support challenge. Would not discount the trade history mentioned in the Weekly section, but perhaps a strong rally into expiration off of a retracement back to the low $3.70’s would keep the historical trend in place. Over all — still in the range between $3.72-$3.98– continue to play it.

Major Support: $3.821, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.508-$3.485
Major Resistance: $3.968, $4.187, $4.205, $4.238

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Likely Be an Eventful Week Coming

Daily Continuation

Discussed the recent history of expiration’s in the few month in the Weekly section — so enjoy the read. Trade last week provided great opportunities at support and then the failure at resistance all taking prices back to where they started. Similar action should be expected this week– perhaps inside last weeks range. Don’t see a major breakdown or breakout coming in the next 5 days — but you never know.

Major Support: $3.821, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.508-$3.485
Major Resistance: $3.968, $4.187, $4.205, $4.238

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Strong Lower Lows

Weekly Continuous

Prices traded down to interim support before garnering the strength to form a nice rally. Support from declines were found by the lower closing low suggested that significant support presented by the continuation 50 – day SMA and the trend line rising from lows traded in late May and late June. As noted last week this was the initial area for prices to be tested.

A mild warning here, in addition to that reasonably formidable technical support being tested and rallying –the last five expiring contract months have shown a consistent tendency of rallying during the final week of their tenure. Historical analysis continues to indicate that prompt gas…whether it is September or October, is vulnerable to more significant decline but given the tendency to rally into expiration…every month since and including February except March has (Feb closed higher each of its last three days, April three of the last four, May four of the last five, June two of the last three, July each of its last five and August eight of its last nine), it seemed prudent to alert traders of that trend that they have forgotten.

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Bounce Off of Support Was Expected

Daily Continuous

Not sure what piece of news stimulated the late morning run in prices but the reason is meaningless. The facts are the market is behaving just the way it should after breaking through support earlier. Support has been tested now the prices should test resistance, but the question is where will the test occur– at the high end of the recent range ($4.02) or somewhere in the $3.90’s. It should happen this week.

Major Support: $3.821, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.508-$3.485
Major Resistance: $3.968, $4.187, $4.205, $4.238

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Lower Lows and More Consolidation

Daily Continuous

Signals showing the annual seasonal weakness continue with the declines yesterday setting a lower low. Continue to expect some sort of counter trend rally coming before expiration (likely). That rally should stay within the recent range but wherever it goes to — it may provide an area to sell into the rally for later in the fall.

Major Support: $3.821, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.508-$3.485
Major Resistance: $3.968, $4.187, $4.205, $4.238

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Just What We Were Expecting

Daily Continuation

Prices extended lower and set a lower low — discussed that this is the pattern that should gradually take prices lower to test support. Will go into some of the targets for the decline in the Weekly area unless they become important prior to the weekend. Prior to that, a new range seems to be developing between $3.82 and $4.00 – play it.

Major Support: $3.87, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.187, $4.205, $4.238

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That Is What I Was Talking About

Daily Continuous

Prices tumble to the mid term support only to find buyers and rallies to initial resistance before melting back during the close. This is the type of activity that should continue periodically over the coming weeks. While this action will develop support and resistance areas for what will likely be a annual rise in prices during the fourth quarter.

Major Support: $3.87, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.187, $4.205, $4.238

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Declines Continue

Daily Continuation

Discussed last week in the Daily that I was waiting for the market to decline into some support areas , testing the determination of the bulls. It looks like this period is starting to occur as the volume increased during the declines of last week. The declines should continue to test various levels of support, finding some buyers at each– the trade should follow that when the buying evaporates at a lower highs — selling resumes testing lower levels of support.

Major Support: $3.87, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.187, $4.205, $4.238

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Historical Seasonal Weakness Begins

Weekly Continuation

After last week’s highest weekly close since December ’18, Sept made one more low volume push higher but failed well below the last two weekly highs at 2.187 & 2.205.  The reversal from a just slightly lower high (2.185) traded with the highest volume since the end of calendar June and continued to increase as the prompt fell.  Average daily volume for the week ending 08/13 increased an estimated 95,000 contracts and added up to the highest total in six weeks. This may have been the beginning of the seasonal correction talked about here for weeks.

Further evidence supporting the weakness theory lies with September declining for the second time in three weeks with a closing high sandwiched between.  The last time there were two declines in three weeks (continuation) was during the final stage of the weakness that ended with the March Q1 low. Since then price declines have been limited to a single week which were all followed by a higher closing high or one unchanged. (although there was that one unchanged close for week ending 07/16…the rarity of which was noted at the time). 

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It Is a Start

Daily Continuous

That was a good start of a correction discussed yesterday–we shall see if it is a start of the correction needed to bring elements into perspective. Until the correction goes into full mode down– expect support around $3.87 as the bulls are not done yet.

Major Support: $3.87, $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.187, $4.205, $4.238

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